What South African Consumers Should Watch for in the 2026 Budget Speech

As South African households continue to navigate rising living costs, the 2026 budget speech will be closely watched for signs of tax relief. For many South Africans, the budget speech is not just about numbers – they are hoping that the finance minister recognises the cumulative pressure households have faced in recent years.

Despite the absence of personal income tax increases over the past two years, consumers have felt the impact of silent tax policies. In 2024 and 2025, personal income tax brackets were not adjusted for inflation. This resulted in bracket creep, a phenomenon that has reduced purchasing power for many working South Africans despite modest salary increases.

“Bracket creep occurs when your salary increases due to inflation, but tax brackets are not adjusted accordingly. As a result, taxpayers can find themselves paying more tax even though their real buying power has not improved,” explains Emile Du Plessis, Head of Economic and Behavioural Analytics at Standard Bank Personal and Private Banking.

Because South Africa operates a progressive tax system, even inflation-linked salary adjustments can push salaries workers into higher tax brackets. This increases the proportion of income tax paid to the South African Revenue Service (SARS). Historically, the National Treasury adjusted tax brackets to neutralise this effect. The absence of such adjustments over consecutive years is likely to have put significant pressure in some households’ finances.

“After two years of bracket creep, taxpayers might be hoping that the 2026 Budget will finally include meaningful inflation adjustments. If the Budget again makes no adjustments, households will need to reassess their spending and trim costs, especially as many living expenses are rising faster than inflation,” adds Du Plessis.

Another pressure point is medical tax credits, which have remained unchanged since the 2023 Budget. At the same time, medical aid premiums and out-of-pocket healthcare costs have continued to rise.

What else should consumers watch for?

Beyond personal income tax, the 2026 Budget may also signal how government plans to manage broader household cost pressures.

Consumers should pay close attention to:

• Indirect taxes, such as fuel levies and sin taxes
• VAT changes, including whether zero-rated food items will be expanded to ease food inflation
• Relief for middle-income earners, who often fall outside of social support but bear the brunt of rising taxes
• Government debt servicing costs as constrained government finances may limit the scope for broad-based tax cuts.